Cryptocurrencies

[OngBonga]

Nice. I'm a way off that kind of money but for now I'm happy enough, I'm up to 7m in safesun now. Each million is like $50 at current price so it's a nice little earner this is. I've put in a sell order in case it pumps overnight.

[Keith]

theres about $175 (probably nearer $190 when its paid) ready for this weeks mining payout at the moment as well to go into that wallet tomorrow

edit . the mining cards cost me £1500 and the eth they've mined is currently worth £2450 and could sell the cards for at least 2k at the moment ..Still got at least 10 weeks before the london hard fork cuts the mining rewards so potentially another £1200 at current prices.

[Keith]

Capture.jpg

Essentially this is what i'm doing , working outthe range thatthe currency is trading in and then seeing how often i can exploit peaks and troughs, setting a fallback position in case the price drops and running a % of each buy trade on to take advantage of breaks out of the trading range

[Keith]

eth.jpg

bought this ETH 10days ago to add to long term holds .....50% in 10days isnt to shabby

[Keith]

kava.jpg

this is KAVA - taken 2 ~9% trades on this the last couple of days . think the 6.55 buy in hindsight was a bit ambitious, but hopefully it will come good . already have the buy set for if/when it drops

[Keith]

waves.jpg

sold half of the waves and running the other half on to 39.4

example of the Kraken buying wicks here though that can hit a nice profit sometimes with the insta wick down to 28
buys set at 30.25 and 31.25 with the proceeds

[OngBonga]

8.2m

There was a point where I dominated the market, every trade was through me. I'd buy coins cheap, and I'd immediately put them up for sale at a higher price. Someone buys them, I immediately put an order in to buy more cheaper. Nobody was challenging me. Around ten minutes that lasted, so fucking sweet.

[Keith]

what a lovely flash crash ........hehe filled most of my really low buy orders

btc.jpg

^bitcoin

dot.jpg

^Dot

kava.jpg

^Kava

ksm.jpg

^KSM

link.jpg

Link

[OngBonga]

It's a massacre out there. Nearly all my coins are red. dent is down into then 0.7c range after peaking at 2c and consolidating at 1c. I bought at 0.135c so I'm not crying yet.

[Keith]

waves.jpg

sells are generally set for up to 18% gains and a lot of them are ones i sold at the top or the range this morning. The one stop loss didnt actually work as planned but luckily spotted it had sold and managed to get a limit buy through at the previous buying price

[Keith]

i think my trading strategy benefits from sideways and sudden dips as losses are limited and it gives chances to get some cheap buys .

don't sweat the dip on the long term holds ....you werent selling them by definition anyway , your portfolio valuation is just worth a bit less than it was

[Keith]

It's a massacre out there. Nearly all my coins are red. dent is down into then 0.7c range after peaking at 2c and consolidating at 1c. I bought at 0.135c so I'm not crying yet.

Ong , think you are making a mistake just holding onto the Dent , looking atthe graph it doesnt look pretty over the last month especially considering how everything else has gone up in the same period of time. you may see a bounce up to .11 and if you do, think about selling half and moving into some other coins and spread your risk.

[boost]

as an aside ...are any of you guys interested in a private discord channel .

kinda feel nervous about posting publically how much i have in crypto .

its also a lot easier to post screen shots as well

I've never discorded. It's like the old school Skype or Ventrillo, right?

I'd be down. I kinda get what you guys are doing and would like to try my hand, but I'd also like to pick your brains to make sure I actually get it.

[OngBonga]

I guarantee that if I pull out of dent it'll rocket.

I'm not panicking. If I go into another coin, that's a risk too. And I have exactly the kind of luck where I go into a coin, and it tanks while dent rockets. So nah I'd rather just wait to see what dent does. I'm in this one for the long haul.

I'll reconsider around 2c.

[boost]

I guarantee that if I pull out of dent it'll rocket.

I'm not panicking. If I go into another coin, that's a risk too. And I have exactly the kind of luck where I go into a coin, and it tanks while dent rockets. So nah I'd rather just wait to see what dent does. I'm in this one for the long haul.

I'll reconsider around 2c.

I know there's a lot of gamble to all this, and I don't mean to tell you how to roll your dice, but you've got some magical thinking operating-- maybe just make sure that only operates in the spaces between applicable empirical thinking.

[OngBonga]

The fact of the matter is, you can't really be taking financial advice off people when it comes to crypto, especially selling it. I don't want to be blaming anyone else but myself for any mistakes I make. If I end up with nothing, that's the way it goes for many people in crypto, just like poker. A risk I'm willing to take.

There's always a better performing coin than the one you're in.

[Keith]

The fact of the matter is, you can't really be taking financial advice off people when it comes to crypto, especially selling it. I don't want to be blaming anyone else but myself for any mistakes I make. If I end up with nothing, that's the way it goes for many people in crypto, just like poker. A risk I'm willing to take.

There's always a better performing coin than the one you're in.

This

You can see what other people are doing but at the end of the day , its your money , there is no "right" answer and you have to make the investment decisions that you are hapopy with . Not only what you are buying , at what price and if when you are selling , but how much are you willing to risk . this is very like poker .....you can have 95% equity on the turn but you can still get the sucker punch that wipes you out

Not sure if Ong agrees , but there is a lot of similarity between poker and crypto trading, you have the rake (fees) , high variance you cant control and sensible bankroll management will help limit your losses when things go bad. Choosing your coin is a bit like table management , if table turn bad best to leave same with coins,

[Poopadoop]

The fact of the matter is, you can't really be taking financial advice off people when it comes to crypto, especially selling it. I don't want to be blaming anyone else but myself for any mistakes I make. If I end up with nothing, that's the way it goes for many people in crypto, just like poker. A risk I'm willing to take.

There's always a better performing coin than the one you're in.

I'm pretty sure you missed Boost's point. If you think your actions affect events in some illogical cause-and-effect way like "If I sell it will immediately go up in price," then you are engaging in magical thinking. It's like saying "If I fold it will mean he was bluffing and if I call it means he was valuetowning me." It's either one or the other regardless of how you react to it.

[OngBonga]

If you think your actions affect events in some illogical cause-and-effect way like "If I sell it will immediately go up in price,"

I'm talking from a superstitious pov, I don't think me selling can cause the price to go up. It's just a have the opposite of the Midas touch.

[OngBonga]

Not sure if Ong agrees , but there is a lot of similarity between poker and crypto trading

For sure. Even the BR management analogy holds. I'm much more aggressive and reckless with a small BR than I am with a large BR in both poker and crypto. My dent is sort of a large BR, so I don't want to take risks by moving it about. I appreciate leaving it idle is also risky, but it's the less stressful risk. My other coins are all small bags, so I'll aggressively buy and sell, or move them into bullish coins if I find a decent candidate.

I've just set a sell order for this safesun coin, around 3/4 of my holding for around $650, leaving 2.5m behind. If this order fills, I'll spend the $$ on BNB, which will be a long term hold.

[Keith]

waves1.jpg

yesterdays crash WAVES buys sold this morning for 14 and 18% profit, buy set at 29.75

[OngBonga]

12.5m

I'm starting to neglect normal life so I can trade. I haven't had a shower since I started this. I just had to check how long it's been. Yup it's a week. Thought so.

No shame. I'll shower tomorrow.

[Keith]

no smoking then Ong?

[Keith]

last of 1 KSM from the 3.6 KSM i bought on the dip 2 days ago at 420 and 380 (average buying pice was 403.7) just sold for 480 for 18.9% profit ($280)

just bought some DOT as well on a sell off wick

[OngBonga]

I cleared out most of my shitcoins on bitmart yesterday. I bought 0.66 $BNB which is essentially a savings account, leaving a $10 buy order for each of the shitcoins so I can get back in cheap if the price crashes. All orders filled while I slept.

Also still have just under 5m safesun which I'm going to continue to grind to build up my $BNB balance.

[OngBonga]

no smoking then Ong?

I'm always smoking.

[Keith]

think BTC could head down to 52-53k zone lowered all my buy prices in case it does.

[OngBonga]

I'm not sure about bitcoin. I no longer think it's the safest coin to put money into. This is why I chose $BNB to dump profits. People actually need $BNB to pay fees, the demand is always going to be there. $ETH has ridiculous gas fees and I have no idea why people use it.

[OngBonga]

So in three hours I've added over 2.5m to take me to 7.25m

That's around $100 added, which is basically $30+ an hour. Now we're getting somewhere.

[OngBonga]

There is zero resistance too, this coin looks prime for a pump.

edit - spoke too soon, a whale has just slapped in a $4k sell order.

[Keith]

think BTC could head down to 52-53k zone lowered all my buy prices in case it does.

it was more a case if BTC dumps , the whole market will drop

it went down to 53600 and seems to be recovering now

[OngBonga]

Sure, but I kinda feel like BTC will grow slower than its rivals.

It took me a long time to figure out, but I think I know why altcoins crash when bitcoin does so. It's simply psychology at play. Once people think there's a correlation, there is a correlation. Once people see bitcoin drop, they pull money out of all their coins so they can buy the dip. It's a self fulfilling prophecy. Some coins don't react this way because it depends on the coin. Doge, at least when it was under 10c, seemed to ignore what bitcoin does. That, I believe, is because it's largely a community of holders, it's cult driven and people don't pull their money out when bitcoin drops, so doge doesn't drop with it. Of course there are lots of speculators, but I think most people are holding and waiting for $1+. I suspect doge will really struggle to pass $1, though it'll approach it.

[Keith]

theres lots of self fullfilling prophecies as well ....like support and resistance ......which is basically what i'm exploiting ...everyone has heard of it so they look to sell once it has hit its tops and started to drop and when its dropped they are looking to see if it goes through resistance and jumping in and buying when it bounces.

They are scared of missing out on the pump if it continues on instead of reversing . I dont care i've set what i want to take out of the trade and then move on to the next buying opportunity. if you wait to see what happens you usually buy dearer and sell lower than you could have on the coins i'm trading.

different story though with coins in a long term up or downtrend . those are the long term holds and coins to get out of

[OngBonga]

I exploit support and resistance, too. Different take on it with what I'm doing, but it's a good measure of what kind of difference I can expect to see over a period of time. If there's plenty of resistance, it gives me a solid idea what my maximum buy back price can be. Likewise, solid support means I can use it to set my minimum sell price. Anything beyond those figures is a bonus, but it helps to analyse the market to see if it's worth sticking around. Currently there's something like 20% difference between support and resistance, so I'm active.

Up to 8.8m

[Keith]

you're a multimillionaire lol

[OngBonga]

I just really annoyed a fat whale. I'm employing really aggressive tactics to keep in front of the queue. I kept placing 1m sell orders in an instant to counter a rival. He showed me his roll with a huge motherfucker sell order, it was something like a fucking quadrillion coins, I didn't count the zeros but it was clearly intended as a fuck you to me. It was worth $40k ish I think. The order didn't stay there long. Made me laugh. I've been dominating to the point I'm actually tired. It's kinda exhausting. But there's such huge gains I feel like I'm stupid to not carry on. Tonight is good. I'm back above 10m. That 0.66 $BNB is basically free now.

[OngBonga]

Splitting he orders is an insanely good tactic, haven't seen anyone else obviously doing this but it allows me to have an order ready to instantly respond to a challenge. If my rival has all his sell in one order then he has to cancel it and edit it, which takes a few seconds. I'm winning lots of trades this way.

[Keith]

are you putting in conditional sell and buy orders ? .....i.e i'm putting a limit buy order in and then theres a conditional trade box you can tick on kraken that then lets you put a limit sell order automatically at the price you set once you have bought.

so you can buy and sell once overnight/during the day without having to be around

[Keith]

looking at it it looks like the volatilty has reduced a lot which must be making the trading marginal at best?

[OngBonga]

I don't think bitmart has that function. And the volatility with safesun is fine, 21.76% the swing between the last two trades, which I profited from.

12.4m once this buy order fills. I've made close to $100 since my last update.

[OngBonga]

Buy order filled. I have 11.4m, there must have been someone else's 1m order hidden in mine. Still, insane profits. I had 10m half an hour ago.

[OngBonga]

Ok I now have 5.5m safesun and 1 whole $BNB

Fucking awesome night

[Keith]

wow bigger dump than i was expecting BTC 47k

[OngBonga]

haha fuck me I haven't been watching.

Now might be a good time to buy bitcoin.

[OngBonga]

6.2m

Right I'm fucking done for the night, Jesus. I'll put in a sell order ($230) overnight in case it pumps, leaving me 3m to keep playing. That order probably won't fill, but I'll be delighted if it does. But this is the kind of low market cap low liquidity coin that organised pump and dump groups might target. Hope so.

[OngBonga]

Shit me I wish I'd waited to buy $BNB, it's nosedived. Fuck you bitcoin.

Lots of people will be filling up right now though. It's bargain season.

[Keith]

think BTC could head down to 52-53k zone lowered all my buy prices in case it does.

Yep .......gonna make a killing as a result of this ......hopefully some 35% + gains just to get back to previous sell levels

[Keith]

put 2k on binance last night and managed to pick up BNB@603 VET @.178 ands MATIC @1.06

[OngBonga]

I just made a pretty stupid mistake. I typo'd in the buy box and literally bought coins off myself. That's 10% written off.

[Keith]

one advantage of holding even the smallest amount of BNB on binance is that it reduces your limit commision rate down to .075.



doesn't look like you can set up a conditional sell as part of the purchase or vice versa ......may need to investigate more ....but kraken seems an easier interface with the disadvantage of higher fees ..... downside is they dont have bnb , matic or VET available

[OngBonga]

My latest tactic is to accept a break even trade in order to squeeze out others, in the hope they get bored and frustrated and look for another market to hustle. This is fun.

[Keith]

ADA pump has just about got me back to where i was before the crash

[OngBonga]

A week ago my binance balance was around $1500 and my bitmart balance was under $100

Today they are both $1000, binance slightly better but I'm willing to bet it won't be in the morning as I expect BNB to recover faster than dent.

I'm at 10.5m safesun again, which means that the BNB coin is free, and so is the 10m extra coins I have compared to a week ago. Basically a $900 week.

If I get to £6500, I'll have to declare it to the benefits office and sign off. That will be a fucking pleasure.

[OngBonga]

I've got $50 worth of mooncunt on metamask too. I'm quite happy to forget about that though.

[Keith]

A week ago my binance balance was around $1500 and my bitmart balance was under $100

Today they are both $1000, binance slightly better but I'm willing to bet it won't be in the morning as I expect BNB to recover faster than dent.

I'm at 10.5m safesun again, which means that the BNB coin is free, and so is the 10m extra coins I have compared to a week ago. Basically a $900 week.

If I get to £6500, I'll have to declare it to the benefits office and sign off. That will be a fucking pleasure.

is that earned 6500 ? or 6500 in savings

i.e if you approach that level and its based on savings you could upgrade your computer , smoke more weed etc

[OngBonga]

That's the savings threshold. I'm pretty sure that I'm borderline working here, but since this isn't a guaranteed income, and my assets are under the savings threshold, it's not a problem. That's certainly the case with poker.

I'm obviously not ready to sign off yet. $2k won't last long with no income. I'd be back on benefits within two months, and have no assets. It's definitely in both my interest and that of the taxpayer for me to keep grinding.

It's very tempting to cash out a bit of money and buy a big fuck off bag of weed, but I feel like that would be somewhat reckless.

[OngBonga]

I mean, I would like nothing more than to be earning enough money to support myself. I don't take pride in having to live off state handouts. It's just preferable to a job I hate. But if this last week is something I can repeat, then it's a matter of time before I'm in business.

[Keith]

if you have to sign off , you effectively become self employed which would let you

claim cost of computer, monitor etc as cost of business
claim part of your rent/electric as part of your operating costs
claim subscriptions for things like trading view as operating costs when related to your "work"
claim any accountancy fees against taxable profits etc

downsides are that as your job is effectively trading crypto , the income is more likely be treated as income tax rather than capital gains.......this is where your accountant would come in

Never had to deal with benefits .....but are you supposed to be declaring your "profits" to dole office as income ? no idea on that

[OngBonga]

It's a grey area, kinda like poker but even less clear. Poker is considered by the govt to be gambling, so it's clear that if I win less than the savings threshold, it's no different to winning on the lottery. Crypto trading is not gambling, it's self employment. It gets difficult though when you consider that the govt does not consider crypto to be "money", it's an asset. So it's basically like a painting until I sell it. With this in mind, I haven't made any profit yet, since all of my crypto remains "asset", not "money".

I'm not going to pretend to be 100% sure how it works, and there's definitely an element of me wanting to remain ignorant on the matter as I'd rather not know if I should be declaring this already, but it seems crazy. If they tell me I'll lose benefits, then I'll have no choice but to stop trading. That doesn't help either me or the taxpayer. So morally I'm quite comfortable with how I'm handling this. I treat it like savings, and when I hit the threshold, then I'll treat it like a business. .

[Keith]

BIM56850 - Financial traders - instruments and shares: case law and individuals


In the past, the approach taken in deciding whether a company is carrying on a trade of buying and selling shares and other financial instruments has been different from that adopted for individuals. The basis for this lies in the comments of Pennycuick J in Lewis Emanuel & Son Ltd v White [1965] 42TC369. At page 377 he said:
‘The word “speculation” is not, I think, as a matter of language, an accurate antithesis either to the word “trade” or to the word “investment”: either a trade or investment may be speculative. On the other hand, it is certainly true, at any rate in the case of an individual, that he may carry out a whole range of financial activities which do not amount to a trade but which could equally not be described as an investment, even upon a short-term basis. These activities include betting and gambling in the narrow sense. They also include, it seems to me, all sorts of Stock Exchange transactions. For want of a better phrase, I will describe this class of activities as gambling transactions…’
For companies, however, the position was different. Pennycuick J said:
‘it is much more difficult to bring the activities of a company within the class of gambling transactions. An individual may do as he pleases: a corporation must act within the limitations of its memorandum of association…where a transaction can be brought within the scope of an authorised object - e.g. investment or dealing - one would not readily treat the transaction as having been carried out … in pursuit of an unauthorised object e.g. gambling. In other words, one expects a trading company’s activities, apart from capital investment, to be by way of trade.’
Pennycuick’s view that, for individuals, share transactions could amount to investment, trading, or speculation falling short of trading, was followed in Salt v Chamberlain [1979] 53TC143. Oliver J said:
‘Where the question is whether an individual engaged in speculative dealings in securities is carrying on a trade, the prima facie presumption would be, as Pennycuick J suggested in the Lewis Emanuel case, that he is not. It is for the fact finding tribunal to say whether the circumstances proved in evidence or admitted take the case out of the norm.’
So for individuals we take the view that transactions in shares which do not amount to investment are speculative transactions falling short of trading, unless there are particular factors which take the case ‘out of the norm’. There is more on this at BIM56860.
Shares which are dealt with speculatively or as investments are dealt with under the Capital Gains Tax rules. For futures, options, and contracts for difference (including swaps), see BIM56880 and BIM56900.

[Keith]

BIM56860 - Financial traders - instruments and shares: three cases involving individuals


An activity of buying and selling shares and other financial instruments undertaken by an individual will normally amount to investment or speculation falling short of trading unless there are factors which take the case ‘out of the norm’ (see BIM56850). Three cases where such activities have been considered are:

• Salt v Chamberlain [1979] 53TC143,
• Wannell v Rothwell [1996] 68TC719, and
• Manzur v HMRC [2010] UKFTT 580(TC).

Salt v Chamberlain

The Commissioners in this case found that Mr Salt was not trading, and Oliver J held in the High Court that the facts entitled the Commissioners to come to this conclusion.
Mr Salt was a mathematics graduate who used his knowledge of computers to forecast the movements in share prices. In the period 11 December 1968 - 31 March 1973 he entered into approximately 200 transactions for the purchase and sale of securities, which included put and call options and settlements at the end of an account for balances only. He used his own funds as well as borrowings from the bank and against life assurance policies.
Wannell v Rothwell

Mr Wannell had previously worked for a commodity futures dealer as a trader prior to the commencement of his activity. His duties had included advising clients on long-term investments and short-term trading opportunities in commodity futures and options. He had obtained qualifications relevant to his duties and, in the course of his own activity, had access to market reports and analysis but not a full screen service. All the transactions were placed with a broker. There were 11 purchases and sales of commodities between May and October 1986 and 46 purchases and 49 sales of shares between October 1985 and August 1987. He dealt on his own account and there were no customers.
The Deputy Special Commissioner said:
‘The essential point in the present case is that of organisation. Was the Appellant, doing two or three deals a month from home through brokers, but doing them with the benefit of experience, training and contacts which he had, organised in a way that a trader could be said to be organised? The case is very close to the borderline, and if the only question I had to decide were whether the Appellant was trading, I might be inclined to give him the benefit of the doubt and find that he fell, by a hair’s breadth, on the trading side of the dividing line.’
This case considered not only the question of whether Mr Wannell was trading but whether he was trading commercially for the purposes of relief for losses (see BIM85705), and the Deputy Special Commissioner concluded that:
‘a case which is so close to the trading borderline because of its lack of commercial organisation is bound to be on the wrong side of the [loss relief] borderline.’
When this case came before the High Court, Robert Walker J found that the Deputy Special Commissioner must be taken to have found that Mr Wannell was trading, but also that he had had sufficient evidence before him to come to the conclusion that the activity was not carried on commercially, so the losses could not be set off against general income. There is more information on losses in this context at BIM85705.
Manzur

Mr Manzur was a retired surgeon. He used his own savings to begin acquiring stocks and shares. He made between 240 and 300 trades in a year using an online stockbroker. Some of the shares were turned over very quickly but others were retained for six months or more.
The tribunal held that Mr Manzur’s buying and selling amounted to the management of a portfolio of investments rather than trading. They upheld the view in Salt v Chamberlain that the badges of trade were of limited value and said there was no definitive checklist which could be used to say whether someone was trading or not. The number and frequency of transactions, and the short-term nature of the holdings alone did not establish trading. Other factors taken into account were:

• the time spent on the activity (about two hours a day);
• the fact that Mr Manzur did not entirely rely on his own expertise but used the advice of brokers;
• that the activities were not characteristic of established share dealers, for example Mr Manzur had no customers and was dependent on market movements alone to make a profit.

Conclusion

The cases discussed above show that no one factor can determine whether an activity has been taken ‘out of the norm’. Some factors may be more relevant in some cases than in others. You have to take a view after considering the relevant circumstances as a whole.

[Keith]

So ..in conclusion .......its a grey area lol

[OngBonga]

So ..in conclusion .......its a grey area lol

Yeah, and this is for stocks and shares, not even crypto. I'm not even sure if the govt treat them the same.

I'm not sure either if, when the time comes, I should be paying CGT on every transaction, or just on profits that are turned into fiat. If it's the former, that kinda makes this prohibitively difficult for me to continue. I can't track every single transaction I make, it would take far too long to calculate, and it would be very expensive to employ an accountant for that purpose. If I trade safesun into USDT and then back to safesun, making an on-paper profit of, say, £20k at the time of the trade, should I pay tax? The asset is still safesun. I believe, and hope, that I'd pay tax when I put that money into my bank. While it's a cryptoasset, it's not real profit. That coin could crash overnight and my profit falls to £10k, under the threshold. Or it could increase and the taxman would be due more. If I'm being taxed per transaction, and when I cash out into fiat, that means I'm being taxed twice for the same asset.

I intend to pay CGT on anything that goes from an exchange into my bank account. I might have to pay income tax instead, I'll cross that bridge when I get there. But I'm not going to pay tax twice on the same asset.

[Keith]

when you sell you create a taxable event ii.e you sell safesun thats a taxable event and you buy usdt thats another taxable event
when you sel lthe usdt thats another taxable event and when you then buy the safesun again ...thats another taxable event


you need to keep a record of all of your transactions

you need to read those crypto tax manuals lol

the taxman makes sure they get paid and if you hide stuff you will pay financial penalties until you pay them

[OngBonga]

I'm not fucking reading manuals. The taxman will get paid, just not twice. And I'm not keeping records of transactions when I make multiple buy and sell orders per hour. That's basically another way of saying "nope you can't make money like this buddy".

Surely the taxman wants me to make money. If the taxman is demanding double tax on my profits, then I'm not going to make any money and he gets the square root of fuck all.

[Keith]

you only pay the tax based on the taxable events which is the buys and sells not when you withdraw

[OngBonga]

But what I withdraw is actual profit. And assuming my coins go up in value, it's better for the taxman to tax my fiat profit, rather than my crypto profit.

I mean, I'm not even going to cash out any fiat unless it's profit. So given that, I'll actually be paying more tax, not less, if I just pay CGT on what I transfer into my bank. I'd rather pay 10% on my cashed out profits than keep detailed records of a ridiculous number of trades, or pay an accountant. So they can investigate me all they like, do all the work that I can't be bothered to do, then give me a rebate.

[OngBonga]

This can't be right. Let's assume I bought 100 bitcoin in 2010. And today I cash it out. Since I haven't made any trades other than my initial purchase, there's no tax due at all. But this is ludicrous as I've made an insane profit.

It doesn't make sense to be taxing individual trades rather than withdrawals.

[OngBonga]

Wait, if I want to cash it out, I have to first turn it into £GBP. There's your taxable event. Ok fair enough on this one.

But, assuming I worked this bitcoin from 1 to 100 over the course of many thousands of trades, I'm being taxed twice, since I owe tax on every transaction, then the final transaction to cash it out.

There's definitely double taxation issues here.

[OngBonga]

No this still doesn't make sense. Trading 100 $BTC into an equivalent amount of £GBP is a zero profit transaction.

[OngBonga]

In fact, all of my trades are zero profit transactions. If I sell 1m safesun for $50, I have made no profit, since the 1m safesun is worth $50.

The profit is coming from the difference between my initial investment compared to what I withdraw.

I don't think our tax policy on this makes any sense, assuming your take on it is accurate.

[Keith]

CRYPTO22100 - Cryptoassets for individuals: Capital Gains Tax: what is a disposal


Individuals need to calculate their gain or loss when they dispose of their tokens to find out whether they need to pay Capital Gains Tax. A ‘disposal’ is a broad concept and includes:

• selling tokens for money
• exchanging tokens for a different type of token
• using tokens to pay for goods or services
• giving away tokens to another person (unless it’s a gift to their spouse or civil partner)

There is no disposal if the individual retains beneficial ownership of the tokens throughout the transaction, for example moving tokens between public addresses that the individual beneficially controls (commonly described as moving tokens between wallets).
Using a mixer, tumbler or similar service so that the individual receives the same type of tokens that they put into the transaction also is not a disposal. However, it will constitute a disposal if the individual puts token A into the transaction and receives token B in return.
If tokens are given away to another person who is not a spouse or civil partner, the individual must work out the pound sterling value of what has been given away. For Capital Gains Tax purposes, the individual is treated as having received that amount of pound sterling even if they did not actually receive anything.
If Income Tax has been charged on the value of the tokens received, section 37 TCGA 1992 will apply. Any consideration will be reduced by the amount already subject to Income Tax.
If an individual donates tokens to charity, they will not have to pay Capital Gains Tax on them, see CG66620P. This does not apply:

• if they make a ‘tainted donation’
• where the individual disposes of the tokens to the charity for more than the acquisition cost so that they realise a gain.

[Poopadoop]

Don't worry Ong, I'll come and visit you in prison.

[OngBonga]

Individuals need to calculate their gain or loss...

• exchanging tokens for a different type of token

Here's the thing. If I "dispose" of a "token" by trading it for another coin, including $USDT, at the time of the transaction, the "gain or loss" is precisely zero. One bitcoin is worth, say $50k. All I'm doing is trading one item for something else of equal value. Zero profit.

Selling tokens for money is the "final transaction" i was talking of earlier, where you said tax isn't due on withdrawals. Based on what you just posted, yes tax is due on withdrawals, as that amounts to a "disposal".

Profit is coming from appreciation in value. In my case, it's a microappreciation measured in seconds or minutes. I'm buying, then selling at profit, then spending the profit on more coins, then selling, rinse and repeat. These are all transactions where, at the precise time of trade, I am exchanging one asset for something of exactly the same value. If that value changes a few seconds later, that's irrelevant. I'm exploiting that short term differential. But I'm not making "profit" on any one transaction. I'm always breaking even. The profit comes from appreciation, and that profit is only realised when I convert crypto into fiat.

[OngBonga]

Don't worry Ong, I'll come and visit you in prison.

Bring weed. Hide it up your ass, and make sure it's well sealed. Also tobacco, rizla, and lighters. Cheers.